SAFETY FIRST

1. 1 SAFETY FIRST New competencies for a Competitive European Agricultural Machinery Industry(Project ID.: I/04/B/F/PP – 154009) The conclusion of Phase three of the Project and the “Map of the Competence” report FINAL CONFERENCE December 15th, 2006 - Ministero delle Politiche Agricole Alimentari e Forestali ROMA

2. MATHERIALS & METHODS 1 The product of Phase III of the Leonardo da Vinci “Safety First” Project is the result of a desk analysis conducted in 4 Countries (Italy, Germany, Greece, and Hungary) selected among those involved in the partnership, on the basis of information and data derived from sector studies, expert contributions and interviews on a sample of 40 companies (10 per Country). The analysis was performed for the 4 selected countries through the filling in of 40 questionnaires which allowed to investigate thoroughly the enterprises. The questionnaires were of two types: the first typewas aimed to give a detailed description of the companies and particularly to tell which are the major factor of competitiveness and which processes and professional roles in the company were more interested by these factors. The first questionnaire is divided into different section: sections from A to C deals with data on the person filling out the questionnaire and general information on the company. Sections D and E are built to collect data on competition and market and information on market trends and on relationships with sensitive areas of the business. The skills/training requirements are investigated in section F, while the management attitude to certification and auditing issues should be the output of section G. Section H is addressed to the investigation of innovation, research and development in the company. Finally section I could give an overview of the services and technical support.

3. MATHERIALS & METHODS 1 For the safety first project section E is particularly interesting, since this section of the questionnaire is dedicated to identifying the skills requirements related to the need to promote or reinforce innovative processes in the enterprises, in order to increase their competitiveness or as a response to the recovery of market quotas they may have lost. The second questionnaire is focused on the detection of the strategic roles in the company, the aim is to gain an accurate description of skills and activities directly by those people who are in charge of this key functions in the company. The research hypothesis is that the skills held by the professional figures placed in charge of the most critical processes and activities are strategic for the competitiveness of the company. Since the report is based upon a relatively small sample of companies it cannot be considered a statistical analysis of the agro-mechanic sector, but it represents a useful report, which provides specific information on the sector.

4. MAP OF COMPETENCES: FUNCTIONAL AREAS OF THE COMPANY functional areas responsible for increase/decrease of market quotas 1 The area that seems to be most directly involved is research and development, even if considerable differences emerge between the various countries. The German and Greek enterprises consider this function to be much more important than the average level; the figures for the Hungarian enterprises are rather low. With respect to the other countries for research and development, Italy is an exception. Investment in research is significantly lower with respect to the German and Greek enterprises (research is in any case an asset with insufficiencies in Italy, and not only in this sector of production), though with more focus on planning. This implies an investment more concentrated on the improvement of products rather than the search for innovative products as such. The second functional area considered to be fundamental to increase the market quotas regards the technical aspect production. The third area is commercial with a lot of attention focused on the sales network and customer relations. Finally it should pointed out the importance attributed to strategic management and planning and to strategic marketing, i.e. corporate management. This is especially significant for a sector where these roles are often directly filled by the owners and where there is little use of external resources and consultancy organisations.

5. MAP OF COMPETENCES functional areas responsible for increase/decrease of market quotas 1 Greek enterprises: the reasons for the increases are mainly related to the improvement of the product quality and innovation, in line with the data on the significant investment in research and development by the Greek enterprises. The value assigned to compliance by the Greek enterprises to international regulations is also significant, with particular reference to ISO quality standards. The reasons given for the decreases regard above all the context of domestic markets. In particular, reference is made to the entry of new European and international competitors and the difficulties related to falling price trends on the market. Hungarian enterprises: factors for the increase of market quotas include the improvement of the overall quality of the products offered thanks to investments in research and development, where this has occurred. However, this factor cannot be generalised for all the Hungarian enterprises, and the number of enterprises that focus on these innovation policies currently seems to be rather low. Among the increase factors there are also the strengthening of the commercial network. factors for the decrease of market quotas, the interviewees believe that the loss of market quotas is due to wrong choices in the development of some products, also in relation to the inadequate knowledge of international regulations and/or those for specific countries

6. MAP OF COMPETENCES: REASONS FOR INCREASE/DECREASE OF M.Q. functional areas responsible for increase/decrease of market quotas 1 German enterprises:increases in market quotas refer to the development of the entire production chain, this investments were made by the enterprises over the past two years to rationalise the production and organisational processes. This has allowed for considerable savings, and the freeing of resources for the development and increase of the overall quality of processes and products. Other important factors: investments in innovation (the index for research is the highest among the 4 countries in the survey) which lead to responses suited to the needs of the market, with particular reference to new segments of the agricultural market. Italian enterprises: the increases are correlated above all with the identification of market niches to operate with the products in which the Italian enterprises are specialised. The signing of agreements and partnerships between Italian enterprises has enabled the strengthening of these trends, also through the acquisition of orders and contracts that exploit the know-how of the enterprises in the sector. The process of expansion towards more distant markets, according to the interviewees, has consolidated over the past two years, also thanks to opening of foreign branches and the strengthening of commercial networks. The decrease factors are a sharp rise in domestic and international competition. This increase comes at a time of crisis in agricultural products, above all on the domestic and local level. Furthermore, the interviewees report that the changes in the Common Agricultural Policy as being a further reason for the crisis in the markets in this sector.

7. MAP OF COMPETENCES: REASONS FOR INCREASE/DECREASE OF M.Q. functional areas responsible for increase/decrease of market quotas 1 According to the analysis of the functional areas responsible for the increase and decrease of market quotas and their impact on the functional areas of the enterprises in the sector, four of these areas seem to be more closely involved than the others: the management area, with particular reference to strategic management and planning and strategic marketing, technical research and development area, the marketing area and the commercial area with particular reference customer relations and sales. Taken together, the four functional areasidentified as strategic for changes in market quotas account for 71% of increases in market quotas and 63.7% for decreases. Among these there are peak rates for research and development, with 26%, for increases, and for strategic management and planning and the strategic marketing, with 21.5%, for decreases.

8. MAP OF COMPETENCES: REASONS FOR INCREASE/DECREASE OF M.Q. functional areas responsible for increase/decrease of market quotas 1 The management areaaccounts for 17% of market increases and 21.5% of decreases. These figures often coincide with company ownership. There is a wide variety of titles (General Manager, Person in charge of strategic planning, Person in charge of strategic marketing, Manager) but this aspect is not especially significant. Skills profiles seem to be more interesting, although the degree of specialization seems to be low. Strategic management and planning, strategic marketing and planning are often provided by a very small number of personnel, and in some cases just one person, above all when these activities are undertaken directly by the owners. The training of these figures is on the university level. This is an inevitable trend, above all for the younger generations, and quite widespread in all the production sectors. The people in corporate leadership with just a high school education belong to the older generations. This generation, without a university degree, has in any case proved to be up to the complexity of the job and its responsibilities, thanks to their solid professional experience and informal, on the job training.

9. MAP OF COMPETENCES: REASONS FOR INCREASE/DECREASE OF M.Q. functional areas responsible for increase/decrease of market quotas 1 The marketing area accounts for about 9% of market increases of market and 15% of the decreases. The average age of those who have positions in this sector is lower than for persons in strategic management and planning and strategic marketing. Titles of the most common professional figures in the marketing area are Marketing manager or Product manager. The training of these figures is on the university and post-graduate level (specialised degrees). The values assigned to this area are not very high: this figure is a combined result of two quite significant critical factors: • First of all, marketing, also through forms of more significant collaboration with strategic marketing (the marketing area, according to the interviewees, neither undertakes market research activities nor oversees any such activities assigned to third parties), is one of the functional areas which more than the others, according to the data from this research, requires further organisational development; • The relatively low impact on changes in market quotas assigned to this area indicates a lack of awareness of the strategic nature this area may have to provide indications useful for determining supply according to demand, also with a view to anticipating market requirements.

10. MAP OF COMPETENCES: REASONS FOR INCREASE/DECREASE OF M.Q. functional areas responsible for increase/decrease of market quotas 1 The third functional area is the commercial network, the professional figures involved are the typical ones in this functional area, the titles of the professional figures involved as stated are Sales manager, Commercial manager or foreign commercial manager, customer service manager, Area manager. The training of these figures is generally rather high, but not in the context of the Italian enterprises. We find university and post-graduate qualifications both in Germany and Greece, university and high school graduates in Hungary, and above all high school graduates in Italy. According to the interviewees, the commercial area accounts for 19% of market increases and 16.5% of decreases. This high rating is supported by the fact that this functional area and its personnel work in a wide range of activities, some of which are strategic for the enterprises. It seems rather eccentric that the analysis of demand is made partly by this area, and that this personnel conveys the information to the functional areas of the company that deal with it, mostly to make the supply side compatible with the requirements.

11. MAP OF COMPETENCES: REASONS FOR INCREASE/DECREASE OF M.Q. functional areas responsible for increase/decrease of market quotas 1 In the fourth functional area, research and development, the professional figures involved are rather diversified with regard to their background training, with a prevalence of mechanical engineers as well as other people with management and design skills. The skills profiling shows various degrees of complexity, from prototypes for new machines and components to drawing up technical brochures and manuals. In terms of organisation charts, the titles of the most common professional figures in the commercial area are: mechanical engineer, agricultural engineer, product research, product tooling design. The training of these figures is the highest of all those included in the four functional areas analysed in this research report. The personnel all have university degrees with post-graduate specialisation (research doctorate, masters, specialisations etc). The average age is the lowest of the four categories examined, at about 35. The research and development area accounts for 26% of the market increases and 10.7% of the decreases. This undoubtedly important rate with regard to the increases does not, however, appear to be justified by the type of job activities attributed to the various professional figures. There seems to be a very wide range of activities assigned to the research and development area, and the analysis conducted does not always clarify which of these activities, according to the interviewees, concretely leads to a significant competitive advantage.

12. MAP OF COMPETENCES Training and skillsneeded as expressed directly by the enterprises in the sector 1 • The Project aim is to identify the skills requirements mainly related with the strategic factors of the enterprise and with the factors of innovation. • The enterprises have been asked to state the factors and causes which according to them determine the needs for innovation in the enterprises. • the main cause leading to innovation requirements are: • changes in their reference market • increase of competition, internal and external, • consequent loss of competitiveness. • need to increase corporate efficiency. • Certification, and more in general updating of regulations • the increasing opening of markets and their internationalisation (gradual normalisation of production procedures and the adjustment to processing and product standards) • The acquisition of new skills connected with the need to correctly govern the factors of innovation generally occurs in three main channels: • acquisition of new resources externally, • direct acquisition of specific know how from third parties (consultants, experts, etc.), • training.

13. MAP OF COMPETENCES Training and skillsneeded as expressed directly by the enterprises in the sector 1

14. MAP OF COMPETENCES Training and skillsneeded as expressed directly by the enterprises in the sector 1

15. MAP OF COMPETENCES: RESULTS 1 The acquisition of new skills connected with the need to correctly govern the factors of innovation generally occurs in three main channels: acquisition of new resources externally, direct acquisition of specific know how from third parties (consultants, experts, etc.), training. Training, as previously mentioned, is another tool useful for acquiring new skills related to the need to correctly take into account the factors of innovation. The initial question put to the interviewees in this regard was whether the company had conducted analyses on training requirements, and if so, who conducted this analysis. About half of all the interviewees said that they had conducted this type of analysis. Here, too, there were rather significant differences, with Hungarians and Italians representing the two extremes. The former said that analyses on training needs had been conducted only in 20% of the cases while the latter said that these analyses had been conducted in 85% of the cases. The Greek and German enterprises showed the same results, with 50% responding Yes and 50% responding No. On the whole, the training initiatives undertaken in the past two years by the enterprises in the sector were concentrated above all in the development of the technical staff areas, with special focus on computers, maintenance, quality control and logistics. Adding together the percentages of this area, 1/3 of training initiatives were undertaken to support and strengthen these activities. Finally, a consistent part (11%) was dedicated to consolidation by investment in the human resources of the commercial network for sales activities and customer relations.